Spending Review 2020 – Our highlights
Describing how our, “economic emergency has only just begun”, Chancellor Rishi Sunak began his review by highlighting the importance of the priorities of the British people, mostly focusing on the UK’s recovery in terms of public finances. In what has been a significantly stressful year for small and large businesses alike, we give our main take-aways relevant to your business. The government information on the Spending Review can be found here
Business rates multiplier frozen – This freeze will take place over the 2021-22 financial year. The government estimates it will save businesses in England around £575m over a period of 5 years, further pledging to compensate local authorities for the change.
Apprenticeship funding for Small and Medium sized Enterprises – Beginning in August 2021, employers that pay the Apprenticeship Levy will be able to transfer unspent levy funds to SMEs through a pledge amenity. However, unspent levy funds continue to cease after 2 years. Additionally, an online service will be launched to match levy payers with SMEs that align with their business concerns
Income tax personal allowance – The personal allowance for 2021/22 will be £12,570 (increased from £12,500 in 2020/21).
Income tax basic rate limit – (quoted from here) – “The basic rate limit is always a multiple of £100, and when the limit is increased, the legislation allows for the limit to be rounded up to the next £100 (see s21, Income Tax Act 2007). This means that the basic rate limit for 2021/22 should be £37,700 (up from £37,500 in 2020/21).”
National insurance – (quoted from here) – “The Spending Review also confirmed that the government will also use the September Consumer Price Index figure as the basis for setting all national insurance limits and thresholds and the rates of class 2 and 3 national insurance contributions for 2021/22”